Dubai picks 4 banks for $1.5bn bond

Dubai has mandated four banks for a sovereign bond of up to $1.5 billion which may be launched as early as this week, two sources familiar with the matter said on Tuesday. The Gulf Arab emirate, which has been slowly recovering from a crippling debt crisis, selected HSBC, Citi, Dubai Islamic Bank and National Bank of Abu Dhabi, said the sources who spoke on condition of anonymity. The government is mulling a dual-tranche dated issue which may be an Islamic bond, or sukuk, said one of the sources. It has also updated its bond prospectus. Dubai's five-year credit default swaps have narrowed dramatically since the emirate was hit by a debt crisis. Spreads stood at around 370 basis points on Tuesday, far below the levels around 650 basis points hit after Dubai World announced it needed to restructure some $25 billion in debt in late 2009.